On July 18, 2009, the 20,000 barrel per day Erbil Refinery, owned by KAR Oil Refining Ltd., received its first oil from the Khurmala Dome oil field. The oil is transported via a 40 kilometer, 20 inch buried pipeline from the newly constructed Central Process Station at Khurmala Dome oil field to the Erbil Refinery on the western side of Erbil. This is the first major refinery in Kurdistan and the first private sector refinery in Iraq.
The Erbil Refinery has two distillation units each with a capacity of 10,000 barrels per day. It produces kerosene and diesel for the consumer market and naphtha and fuel oil for the industrial market. The refinery will produce approximately 429,300 liters of diesel per day, enough to fill approximately 5,500 vehicles per day. It will produce 588,300 liters of kerosene per day, enough to provide one tank of kerosene for a heater for one night in 120,000 homes. The fuel oil from the plant will be used to provide energy for heavy industry including cement and brick factories.
Erection of the Erbil Refinery started in 2005 under a contract between the Iraqi Ministry of Oil and the Iraqi Ministry of Industry and Minerals. The project should have taken 18 months to complete, but budget difficulties and inefficiencies caused delays. In late-2008 the refinery was only 60 percent complete, and the Kurdistan Regional Government intervened and privatized the refinery. KAR Oil Refining Ltd. was awarded the refinery and given an ambitious target to commission the refinery by July 2009.
A major expansion of the refinery has already begun. By the end of 2009, the capacity of the refinery will be doubled from its current 20,000 barrels a day to 40,000 barrels per day. KAR Oil Refining purchased a newly built, fully engineered and skid mounted refinery complex from Ventech Engineering near Houston, Texas. The equipment is being shipped to Erbil in late July 2009. The expansion consists of a 20,000 barrel per day distillation unit and process units to make high quality, world standard gasoline, diesel, LPG and kerosene. The gasoline unit will be the first of its kind in Iraq providing up to 95 octane gasoline.
KAR Oil Refining has ambitions to increase the refinery further to an operating capacity of 75,000 barrels per day in 2010. Plans are currently being set and an announcement will be forthcoming.